The raids, which were supposed to have been carried out at 2am today, were brought forward to 5pm yesterday after former Met anti-terror chief Bob Quick inadvertently leaked details of the operation.

Although Merseyside police said only one man was arrested at the university, several student witnesses told the Guardian they had seen two men held. Twelve men have been arrested in total across northern England.

Marcel Deer, a third-year journalism student watching the raids from the top floor of the library, said one of those arrested had been wearing a backpack which he feared might contain explosives.

"There was an announcement over the Tannoy that there was a police situation outside and to stay away from the glass windows," he said. "It made everyone scared because we could see from a distance two foreign-looking guys with their hands tied behind their backs face down on the floor surrounded by four armed police officers. It was worrying because they wouldn't tell us what was going on.

"People were saying it was terrorism and my initial thought was, what if there's any others inside? One had a backpack and you immediately thought 'bomb'. They looked like they could have been students."

Andy Garner, another final-year journalism student, was at a bank when the raid took place. "Two minutes later there were police with machine guns walking towards me. They told us to stay behind barriers. It was all a bit surreal. People were shouting it was a terrorist attack."

Maz Chowdhury, a business and finance master's student, said: "My friend saw the guys fall to the floor and police come with guns. We were afraid when we heard on the news they were from Pakistan because we have people in our class from there, but it wasn't them.

"I'm born and brought up in Liverpool and we've never had problems like this before, not like Oldham or Burnley. Liverpool is multicultural, with a high percentage of Muslims … This is something new."

Naeem Shah, a final-year MBA student from Pakistan, said the arrests might prevent students from Pakistan from coming to study in the UK. "It will create a doubt in the minds of students from India, Bangladesh, Pakistan and all over that they wouldn't be safe in the UK. It makes me feel more unsafe. You don't know what the future of Pakistani students here will now be."

Shuja Khan, a Pakistani PhD student visiting from Leicester University, agreed that the raids would deter overseas students from coming to the UK. "We came to this country with the hope that they will protect us," he said.